How Can We Use Comparative Advertisements in India?

Introduction

Comparative advertisements refer to advertisements wherein brands compare their own products/services with that of competitor’s and assert that their brand is superior or better than the competitor’s. It is a form of Commercial speech which is permissible under the fundamental right to freedom of speech and expression under Article 19 (1) (a) of the Constitution of India.

However, comparative advertisements become disparagement of competitors when the advertiser casts apprehension about the quality of the product of a competitor including unfairly berating the rival products damaging its public reputation. Disparagement amounts to infringement of a trademark under Section 29 (8) of the Trademark Act, 1999 which states that a registered trade mark is infringed by any advertising of that trade mark if such advertising takes unfair advantage of and is contrary to honest practices in industrial or commercial matters, or is detrimental to its distinctive character; or is against the reputation of the trade mark.

Section 30 (1) of the Act also justifies comparative advertising, authorising the use of a registered trademark for the purpose of identifying goods or services of the competitor. However such use must only be done in accordance with the honest and fair trade practices without any mala fide intent and not to take unfair advantage of or be detrimental to the distinctive character or repute of the rival’s mark. Thus, for advertisements to qualify as nominative fair use, they may highlight specific qualities of the product that distinguishes it from that of a competitor provided that the comparison is accurate and true including the use of scientific evidence.

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Landmark Cases on Comparative Advertisement

In the case of Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., the Delhi High Court outlined the considerations as to when comparative advertisements could be considered as disparagement:

  1. Commercial intent of the advertisers in respect of what they are trying to achieve in order to promote their goods;
  2. The most crucial component is the nature of the commercial. It is disparaging if the method is ridiculing and criticising, but it is not actionable if the manner is just to demonstrate that one’s product is superior without demeaning the product of others;
  3. The commercial’s plot and the message it is attempting to convey.

The Court also held that Comparative advertising will amount to disparagement if the Plaintiff can establish the following criteria: (a) A false or misleading statement of fact has been made regarding the plaintiff’s product; (b) That the statement is deceiving or has the potential to deceive the substantial segment of prospective consumers and; (c) The deception is likely to affect consumer’s purchasing decisions which consequently would cause economic losses to the competitors of the advertiser.

Another important case in this regard is the Delhi High Court’s case in Reckitt Benckiser v. Hindustan Lever Limited wherein essential principles of the law on disparagement were laid down:

  1. A tradesman is entitled to declare his goods to be the best in the world, even though the declaration is untrue.
  2. He can state that his goods are better than his competitors.
  3. He can even compare the advantages of the two goods. He, however, cannot, while saying that his goods are better than his competitor’s, say that his competitor’s goods are bad. If he says so, he slanders the goods of his competitors and defames them, which is not permissible.
  4. If there is no defamation to the goods or the manufacturer of such goods no action lies, but if there is such defamation, an action lies for recovery of damages for defamation, the court is also competent to grant an order of injunction restraining repetition of such defamation.

Recent Cases on Comparative Advertisement

Listed below are a few of the recent cases of comparative advertising where the courts have granted injunction against the advertisers on grounds of disparagement.

Harpic v. Domex

In this case Domex, a Hindustan Unilever brand, had launched an ad campaign comparing itself to Reckitt Benckiser’s toilet cleaner brand ‘Harpic’ and claimed that Domex fights toilet odour for a longer period than Harpic. The Delhi High Court granted an injunction against Domex as Harpic was not only explicitly identified but Domex’s advertisement could have reflected upon the special characteristic of Domex, i.e., it can improve toilet odour without referring to the brand name of the competitor. By referring to Harpic , Domex in this case had questioned the efficiency of Harpic in containing toilet odour, disparaging the brand. Thus injunction was granted in Harpic’s favour.

Lifebuoy v Dettol

In this case Hindustan Unilever (HUL) filed suit against Reckitt Benckiser (RB) over RB’s Dettol handwash advertisement, alleging that it disparages HUL’s Lifebuoy soap trademark. The Dettol handwash ad disparaged Lifebuoy soaps by showing a soap with the same shape, configuration and color as HUL’s registered red Lifebuoy soap and claimed that it was not effective in fighting the coronavirus and asserted that Defendants liquid handwash be used instead; HUL contended that RB was aiming to disparage and denigrate HUL’s Lifebuoy product. The Delhi High Court held that an ‘orange bar soap’ could easily be identified as the Plaintiff’s product, the Lifebuoy soap, and hence held in favor of them.

HUL v. Amul

In Hindustan Unilever Limited vs Gujarat Cooperative Milk Marketing Federation Limited (Amul), injunction was granted against Amul’s ‘real ice-cream’ against ‘frozen desserts’ advertisement which were depicted as allegedly harmful to consumers due to the presence of ‘vanaspati/ Vanaspati tel’.

This case settled the principle of law that generic disparagement of a rival product without specifically identifying or pin pointing the rival product is equally objectionable. The advertisers cannot disparage a class of products within which a complaining plaintiff falls and raise a defense that the plaintiff has not been specifically identified. Even if there is no direct reference to the product of the plaintiff and only a reference is made to the -entire class of products in its generic sense, even in those circumstances disparagement is possible.

Conclusion

Advertisements containing comparisons with other competitors including those where a competitor is named are important in the interests of vigorous competition and public enlightenment. Comparative Ads provide a choice to the consumers to choose products/services from the myriad options available in the market. However, the brands before coming out with Comparative Ads should be clear about what aspects of the advertiser’s product are being compared with similar aspects of the competitor’s product. The comparisons should be factual, accurate and capable of substantiation to avoid unnecessary litigation with competitors. Lastly, the advertisements should not unfairly denigrate attack or ridicule other competitors directly or by implication, otherwise a disparagement suit can be brought against the advertiser.

Author: Neha Uppin, Legal Intern at PA Legal.

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